UA Foundation cedes control of donor endowment payouts
The University of Arizona Foundation is transferring control of $70 million in non-scholarship endowment payouts to the university effective June 30, with all future annual payouts following the same path beginning in July.
The University of Arizona Foundation notified donors it plans to transfer $70 million in non-scholarship endowment payouts to the university effective June 30, with all future payouts following the same path beginning in July.
The change, proposed by the university and outlined in a letter to donors from President and CEO John-Paul Roczniak, would give the UA direct legal ownership of funds previously managed by the foundation.
Roczniak said in the letter the change will help meet Days Cash on Hand targets mandated by the Arizona Board of Regents and the university's bond rating agencies.
Tucson Spotlight reached out to the UA for comment Thursday and Friday and to the UA Foundation on Friday. The UA Foundation directed questions to UA spokesperson Mitch Zak. The UA did not provide a statement before publication.
The proposal comes as the UA continues to recover from a financial crisis that emerged in 2023, when the university disclosed a roughly $240 million budget shortfall that led to layoffs, program cuts and heightened scrutiny from ABOR.
As of last June, the UA reported an estimated 77 days cash on hand, still far below the Arizona Board of Regents' required minimum of 140, according to the Arizona Luminaria.
The university has also cut financial aid for out-of-state students as part of a shift toward smaller, "right-sized" enrollment. This week, the UA dismantled its Health Sciences unit, with two sources telling the Arizona Daily Star that 28 employees were laid off as of Aug. 7.
The endowment change adds another dimension to the university's ongoing financial restructuring.
Under the current system, the foundation distributes non-scholarship endowment payout funds at a 4.25% annual rate with a 3-year moving average. For some endowments, beneficiary units or colleges have been able to reinvest their distributions to grow the endowment over time, helping to support long-term strategic planning and larger-scale projects According to the foundation's most recent IRS filing, it held nearly $1.45 billion in donor-restricted net assets as of June 30, 2025.
Foundation staff review each distribution request to ensure funds are used in accordance with donor agreements and applicable law, and hold the funds until the UA spends them or documents plans to do so within 90 days.
Under the proposed change, legal ownership of those funds would transfer to the university, which would distribute them directly for the donor's specified charitable purpose. The foundation would retain control of the underlying endowment investments.
"The university believes this proposal ... will provide it with more direct insight into the availability and use of funds, supporting timely and appropriate expenditures of donor resources," Roczniak said in the letter.
Donors were notified they have the right to opt out of the proposal for their individual endowment accounts. Questions about the change can be directed to Senior Vice President and Chief Financial Officer Craig Barker.
The proposal is subject to renewal on June 15, 2031.
This is a developing story. Check back for updates or contact Caitlin Schmidt at caitlin@tucsonspotlight.org with tips or information.
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